Prices increases leading to call debit spread loss

Question

I recently entered a debit call spread on Apple and I noticed the price of the sold option appreciated at a faster rate than the bought option resulting in a loss even though the stock moved in my desired direction.

I bought the Oct 16, 2020 $450 call and sold a same day $470 call. My positions say that $450 call increased 12% in price while the $470 call increased 31%. (liquidity shouldn't be an issue, there're about 6k and 1.2k open interests for the two strike prices respectively)

In the photo below of Apple calls you can see OTM strike prices appreciates faster than near-the-money strikes, which seem to almost assure that debit call spreads lose money.

Prices of call options of $AAPL

A similar question has been asked, but the answer that was given doesn't really touch on this subject. I don't understand this behavior and would appreciate some guidance.

Answer 1

Would you rather own a $20 stock that goes up 10% or a $1 stock that goes up 100%? Comparing percent gain is worthless. If you look at real time quotes, when there's a significant move like today (up 10+ dollars), for a stock with liquid options, the lower call strike will always appreciate more than higher call strike.

The quotes that you provided are closing quotes. They're useless for comparison because many could be stale (the last option trade was before the 4 PM close of the stock). More importantly, bid/ask spreads widen dramatically at the close and they're not indicative of where the market actually is.

The potential profit of a debit spread is the difference in strike prices less the debit paid. Regardless of how much the price of the individual legs vary, it can't turn into a loss unless you mismanage the trade at expiration